The size of the fiscal policy multiplier – and thus the impact of austerity on GDP – has been a contentious issue since the crisis started. The IMF recently revived the debate by suggesting that the multiplier is much higher than previously thought in the current policy environment. This column discusses independent empirical research that confirms the IMF’s view – the authors’ estimate of the multiplier is in the range of 1.6. Gauging the multiplier: Lessons from history
A Short History of Financial Euphoria
Adam Smith: The Morality of the Invisible Hand Truly a moral philosopher: "The Muir Portrait" of Adam Smith by an unknown artist (Scottish National Portrait Gallery) "Das Adam Smith Problem" — that problem was put to us a century-and-a-half ago by a German economist (August Oncken, little known today except for that memorable phrase), and we are still wrestling with it. At issue is the apparent contradiction between The Wealth of Nations and The Theory of Moral Sentiments — between the political economist and the moral philosopher. This is not a case of an early and a late Smith (as with the early and late Marx).
Max Rudin introduces Bill Moyers and James K. Galbraith
Transcending Medieval Economics « unsettling economics In my new book, Sex, Lies and Economics, about early economics of the late seventeenth and early eighteenth centuries, one of the constant themes is the struggle against the medieval thinking. Beginning with William Petty, the early economists I am analyzing were following the new science, which emphasized close observation to replace received dogma. Here is a nice description of how the dogma was presented at the time. Notice how closely the medieval method resembles the scholastic method that the early economists opposed.
On 8 June, a Scottish banker named Alexander Fordyce shorted the collapsing Company’s shares in the London markets. But a momentary bounce-back in the stock ruined his plans, and he skipped town leaving £550,000 in debt. Much of this was owed to the Ayr Bank, which imploded.
Sociology 185 - GLOBAL SOCIOLOGY - Lecture 5: Walden Bello - Global Financial Institutions
Soros, Epstein, and Caldwell on Hayek Last Thursday must have been Hayek Day. In the morning was the release of the rap video, “Fight of the Century: Keynes vs. Hayek Round Two.” And then in the afternoon a distinguished panel convened in the Cato Institute’s F. A. Hayek Auditorium to discuss Hayek’s great work The Constitution of Liberty, just released in a new definitive edition by the University of Chicago Press.
By Terry Eagleton Praising Karl Marx might seem as perverse as putting in a good word for the Boston Strangler. Were not Marx's ideas responsible for despotism, mass murder, labor camps, economic catastrophe, and the loss of liberty for millions of men and women? Was not one of his devoted disciples a paranoid Georgian peasant by the name of Stalin, and another a brutal Chinese dictator who may well have had the blood of some 30 million of his people on his hands? In Praise of Marx - The Chronicle Review
Hyperinflation in Germany, 1914-1923 - Hans F. Sennholz [This article is excerpted from the book The Age of Inflation.] The German inflation of 1914–1923 had an inconspicuous beginning, a creeping rate of one to two percent. On the first day of the war, the German Reichsbank, like the other central banks of the belligerent powers, suspended redeemability of its notes in order to prevent a run on its gold reserves. Like all the other banks, it offered assistance to the central government in financing the war effort. Since taxes are always unpopular, the German government preferred to borrow the needed amounts of money rather than raise its taxes substantially. To this end it was readily assisted by the Reichsbank, which discounted most treasury obligations.